Does the definition of 'Competitive Business' for City Publications include print ads?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
"Competitive Business" means any business that sells, or grants franchises or licenses to others to operate a business that sells, direct mail advertising or similar services to those offered as part of the CITY PUBLICATIONS System or in which Confidential Information could be used to the disadvantage of Franchisor or its other franchisees; provided, however, that the term "Competitive Business" shall not apply to: (a) any business operated by Franchisee under a Franchise Agreement with Franchisor, or (b) ownership for investment purposes of less than five percent (5%) of the stock of any publicly-traded corporation in which similar services as those offered as part of the System are sold only as an ancillary product, constituting less than ten percent (10%) of the aggregate gross sales of such business. Without limiting the foregoing, "Competitive Business" includes, among other things, magazines and any other print ads, internet advertising, email advertising, QR codes, and search engine optimization services;
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, the definition of a 'Competitive Business' explicitly includes print ads. The FDD defines a 'Competitive Business' as any entity that sells direct mail advertising or similar services, or uses confidential information to the disadvantage of City Publications. The definition clarifies that 'Competitive Business' includes magazines and any other print ads.
This definition has significant implications for a prospective franchisee. It restricts the franchisee's ability to engage in any business activity, even outside of their City Publications franchise, that could be seen as competitive. This restriction extends to owning, managing, or working for a competitive business within the franchisee's exclusive territory or within 25 miles of another City Publications franchise.
The FDD does provide limited exceptions to the definition of 'Competitive Business'. It excludes businesses operated under a City Publications franchise agreement and the ownership of less than 5% of the stock of a publicly-traded corporation where similar services are an ancillary product constituting less than 10% of the aggregate gross sales of such business. However, the explicit inclusion of print ads in the definition means that franchisees must be very careful to avoid any potential conflicts of interest.